Global Firms Mulling Expansion of Operations in India

Source : Indlaw

With a view to tapping huge long-term growth possibilities in the Asia's third largest economy, a majority of global firms are planning to expand their operations in India, an Ernst & Young (E&Y) study says. 

'Seventy-five per cent of the global businesses which are already present in India and formed part of the survey indicated that they would expand their operations (by expanding facilities or headcounts),' the study reveals. 

In the study, which was done in late 2010, the interviews of over 500 global business leaders on the potential of Indian market were incorporated. 

It says a large majority believe that India will become a global leader in education, research and development, innovation, and as a producer of high value-added goods and services by 2020.

It confirms that India is undergoing a transition, both in terms of investor perceptions of its market potential and in reality. 

On foreign direct investment (FDI) front, the study says India is still in recovery mode. 

With the slowdown in global investment flows, the number of FDI projects in 2010 remained constant compared to 2009 at around 750. 

Overall project numbers in 2010 were up 60 per cent on 2003 and the number of jobs created up by 30 per cent.

According to the survey respondents, the main competitors of India in terms of business appeal are China (60 per cent) and Brazil (9 per cent) among the rapid-growth markets and the US (17 per cent) and Germany (9 per cent) among the developed countries.